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  "docSlug": "990838b0a753",
  "documentTitle": "NQ Mobile (NQ)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2014-04-13 00:00:00",
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  "notes": "Includes a photo of a puppet holding a microphone with an 'N' logo, likely mocking the company.",
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      "text": "To understand why NQ’s results were much worse than expected, investors need to realize that prior audits of the company were likely not as rigorous, and the extra scrutiny made it harder to fake profits and cash flow in Q4.",
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      "text": "In its Q4 results, NQ's uses a massive increase in prepayments to vendors and a big pay down in accounts payable as an excuse for not showing an increase in cash.",
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      "text": "Based on NQ's disappointing Q4 results, including its surprising GAAP loss and negative operating cash flow, we strongly believe that NQ's auditor, PriceWaterhouseCoopers Zhongtian (\"PwC Zhongtian\"), bolstered its level of due diligence during its 2013 audit of the company.",
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      "text": "As we have said multiple times before, audits of public companies are not designed to detect fraud. Auditing standards presume that company documents are genuine and management does not make misrepresentations about their numbers.",
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      "text": "NQ surprised investors by reporting a reduction in gross margin and negative operating cash flow in its Q4 results. This indicates to us that PwC was doing its job in a more robust manner than in prior years...",
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      "text": "PwC's Additional Scrutiny Ensured NQ Reported a Q4 Loss and Negative Operating Cash Flow",
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